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Finding the balance: China's economic outlook

How will China's reform agenda to address regional inequality and environmental sustainability affect each province?

At the provincial level, economic restructuring will be painful for some in the short-term, while others will benefit from strong policy support and the migration of industries. In our latest macroeconomic update, we reflect the economic outlook for each of China's key provinces:

Beijing, Tianjin and HebeiAs one of the most promising policy efforts at rebalancing growth, the Capital Economic Circle will continue to relocate several industries and service sub-sectors from Beijing to its surrounding provinces, Tianjin and Hebei.

Some industries have already moved to Tianjin's Binhai New Area and this will support economic growth there. Hebei's economy faces challenges in the short-term as its steel industry grapples with overcapacity and strict environmental regulations. However, plans to relocate part of Beijing's service sector to Hebei will create opportunities to diversify its economy.

GuangdongAs China's manufacturing and business hub in the South, Guangdong's economic outlook is challenged by the slowdown of export-oriented industries and increasing labour cost. Over the longer-term, it will face intense competition from other emerging markets such as Vietnam.

HenanLocated in China's central region, Henan's economic growth has been largely driven by investment and 'The Rise of Central China Plan' has gradually stimulated infrastructure and industrial development in recent years. The province's abundant mineral resources - especially coal, crude oil and natural gas -will also continue to facilitate its industrial growth.

SichuanOf all the western provinces, Sichuan has the largest GDP and population. Chengdu, the capital city, is planning to set up the 'Hi-tech Free Trade Zone' to attract foreign direct investment and strengthen its industrial competitiveness. Sichuan is also rich in mineral and energy resources, such as gas, which will support industrial growth in the long run.